OPEC+ to continue to cut oil production deeply in 2024

After an online meeting on November 30 (local time), OPEC+ oil producers agreed to cut production by about 2.2 million barrels per day (bpd) by early 2024 as Saudi Arabia and Russia continue to implement the current voluntary cuts.

OPEC+ to continue cutting oil production from 2024. (Photo: Getty Images)

OPEC+ currently supplies more than 40% of global oil production, at 43 million barrels a day. This output reflects a cut of about 5 million barrels a day in an effort to support prices and stabilize the market this year.

The 2.2 million barrel/day reduction this time was decided by the bloc's eight crude oil producers, in which Saudi Arabia and Russia decided to extend the previous voluntary cut of 1.3 million barrels/day.

For the additional 900,000 barrels per day, Russia will continue to reduce production by another 200,000 barrels per day. The rest will be divided among the other six members of OPEC+.

Russian Deputy Prime Minister Alexander Novak said Russia voluntarily cut crude oil and petroleum products.

The UAE agreed to cut output by an additional 163,000 barrels per day, while Iraq said it would cut an additional 220,000 barrels per day in the first quarter of 2024.

Saudi Arabia, Russia, the UAE, Iraq, Kuwait, Kazakhstan and Algeria also announced that the cuts would be gradually lifted after the first quarter of 2024 if market conditions allowed.

OPEC+ is focused on output cuts as oil prices have fallen nearly 20% since late September on concerns about weaker economic growth in 2024, as well as expectations of a supply surplus.

The International Energy Agency (IEA) forecasts that oil demand growth will slow in 2024 as the final stage of the post-pandemic economic recovery ends, along with the development of electric vehicles and some other factors.

Hoa Vu (Source: Reuters)

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